An SF Hacker Hostel Faces the Real World and Loses

Bill Kilmer, right, and Jiahao Li at a "hacker hostel" in Mountain View, Calif., June 13, 2012. There are several hacker hostels in the Bay Area that offer short- or long-term stays for aspiring tech entrepreneurs on the bottom rung of the Silicon Valley ladder. (Jim Wilson/The New York Times)

Jim Wilson/The New York Times/Redux

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An SF Hacker Hostel Faces the Real World and Loses

Bill Kilmer, right, and Jiahao Li at a "hacker hostel" in Mountain View, Calif., June 13, 2012. There are several hacker hostels in the Bay Area that offer short- or long-term stays for aspiring tech entrepreneurs on the bottom rung of the Silicon Valley ladder. (Jim Wilson/The New York Times)

Jim Wilson/The New York Times/Redux

Chez JJ is no more.

The chain of hacker hostels located in San Francisco and Silicon Valley closed last weekend. If you don't live here, you could be forgiven for not knowing what a hacker hostel is. If you do, they're just a part of the landscape in a place where the tech-driven surge in rents and real estate prices has driven even techies to seek creative solutions for housing they can actually afford.

Hacker hostels house aspiring entrepreneurs who agree to live in close quarters—usually for short periods of time—in exchange for cheaper-than-usual rent. The Chez JJ chain, established in 2012, was among dozens of hacker homes that have cropped up in Silicon Valley over the past decade, from The Rainbow Mansion to 20Mission to SiliconHouse. But the cohabitation is not just about a place to lay your head. The idea is that when a mix of engineers, artists, makers, and other like-minded “techies” bunk together, a natural cross-pollination of ideas could emerge—along with a built-in network. The latter can be critical to success in an industry where contacts are everything.

In pop culture, hacker homes have become a jokey emblem of the current tech boom. (TechCrunch last year compared Chez JJ to the “incubator” house in HBO’s Silicon Valley, where members of the show's fictional startup Pied Piper live.) But with booms come busts, and hacker hostels are hardly immune. Chez JJ isn't the first hacker home to suddenly shut down in the midst of San Francisco’s expensive real estate market. But the mix of naiveté and NIMBYism that brought down Chez JJ is the perfect epitome of the city at this precise moment.

The Real World

The problem, like so many other problems in the tech world, is that Silicon Valley solutionism just doesn’t transfer that all that well to the real world. In the real world, even like-minded folks can have clashing egos. There’s always dirty dishes to wash and trash to take out. And your neighbors can get irritated—very irritated—by the constant comings and goings of energetic young people, no matter how idealistic their intentions. Which is what happened at Chez JJ.

Edwin Acosta, a 46-year-old government employee, lived below a Chez JJ unit that was being rented out in the San Francisco Castro District. And Acosta didn't care for his neighbors. He was so bothered by the activity and noise upstairs—where up to 10 residents bunked together at a time—that he filed a series of complaints against the hacker hostel with the city's planning department. He even wrote letters to Brian Chesky, the CEO of Airbnb, where Chez JJ advertised vacancies.

Jade Wang, a 31-year-old neuroscientist who started the Chez JJ hacker hostels, says the house captain—the person in charge of overseeing the residents of the house and various house activities—and tenants did everything they could to appease Acosta. They instituted a shoes-off policy. They bought rugs. It wasn’t enough. Acosta ultimately filed complaints with the city not just for the Castro house but for the other Chez JJ location in San Francisco. (There were three Chez JJ locations in total, two in San Francisco, and one house in Mountain View, Google's hometown.)

"I filed complaints with numerous agencies in San Francisco after experiencing how their business practices were affecting our community," Acosta says.

"Upon learning that they had opened another location, I took the initiative to file a similar complaint, because I became equally concerned by how their business practices might impact that community as well."

Jade Wang at a "hacker hostel" in Mountain View, Calif., June 13, 2012. There are several hacker hostels in the Bay Area that offer short- or long-term stays for aspiring tech entrepreneurs on the bottom rung of the Silicon Valley ladder. (Jim Wilson/The New York Times)

Jim Wilson/The New York Times/Redux

According to Wang and Sasha Willins, a house captain of Chez JJ, Acosta also harassed them, shouting at the tenants, insulting them, and bothering them with frequent knocking and yelling. For months, Willins says, Acosta would put on a children’s song during the day, leave the apartment, and play it on loop for hours.

“He kept escalating the situation,” Wang says. “I couldn’t really put a finger on his motivation, except that he’s just one of those guys who wants to watch the world burn.”

Acosta declined to respond to the specifics of the allegations of harassment except to say that residents at Chez JJ repeatedly asked him and a roommate to notify them directly of problems with noise instead of contacting the landlord. "As a result, constant, ongoing problems with noise left us no choice but to knock on their door to notify them of the issue," Acosta says.

After Acosta filed his complaints, there were multiple visits from city inspectors, and Chez JJ ultimately had to pay thousands of dollars in fines. The inspections became so frequent that the city started charging Chez JJ a fee. In January, unable to take the losses, Chez JJ shut down both of its San Francisco locations. Then in March, Acosta and his roommate, Dan Schellenberg, filed a lawsuit in San Francisco Superior Court against Chez JJ management, citing unlawful use of the premises for non-residential, commercial use; illegal short-term rentals; habitability problems (including molds and bed bugs); and safety concerns.

If the case proceeds, Wang says, she is considering setting up a crowdfund for Chez JJ’s defense.

“I think they’re banking on the fact that it’s cheaper for us to settle than to go to court with them,” says Wang, who declined to comment on Chez JJ profits in 2012 and 2013, but said that in 2014 and 2015, she and the rest of management took losses. Private rooms cost close to $2,000; at the peak of Chez JJ’s popularity, a bunk bed cost $1,200. Wang says the hostel also provided discounts for Hack Reactor boot camp attendees and interns who were accepted into programs at Code 2040, a nonprofit with a mission to increase participation of Blacks and Latinos in tech.

Wang says that although Chez JJ was incorporated as a business, the houses were never meant to be run for profit. "The purpose was to build a community of geeks who are transitioning to life in Silicon Valley, and we ran it to be sustainable, rather than to maximize revenue," she says. Though there were would-be residents who were willing to pay even more than the asking price, it was more important to Chez JJ to get a good mix of folks, Wang says.

'People suffering'

This month, the owners of Chez JJ’s last location in Mountain View decided to sell the house. Given the uncertainty of what having a new owner would be like, Wang and the rest of Chez JJ's management decided instead to shut down operations completely.

For Mark Hooshmand, Acosta’s lawyer, this is good news. “It’s great to the extent that our lawsuit has enabled them now, at this point, to recognize that what they were doing was violating the law,” he says. “But we still seek to recover for the past harm that [Chez JJ] caused.”

Hooshmand says he believes tech and tech culture shouldn’t result in "people suffering." The rise of the sharing economy in particular, he says, has led to new intrusions on other people’s lives. But it doesn't have to. “You can find ways to coexist,” he says. “Maybe younger people don’t recognize this as much because they’re chasing a dream, but lives can be put at risk,” alleging that Chez JJ didn’t have proper insurance for their residents.

“People lose focus trying to cash in on this gold rush type of situation that it’s unfortunate,” Hooshmand says. And the city, he says, can't keep pace. “We end up seeing the effect on the elderly, the disabled, and people that are being evicted.” Hooshmand’s office is also representing the Housing Rights Committee of San Francisco, a tenants rights organization that offers free counseling for San Franciscans, in a similar short-term rental case against another hacker hostel, HackrHome.

Wang, for her part, says it’s been an incredible journey—one she didn’t expect to be a part of for three years. Chez JJ has had about 400 residents pass through its doors, Wang says. “To be a part of all these people’s lives, I think that’s what’s made it worth it, even with what we’re going through now,” she says.